Using Blockchain Technology To Increase Transparency In Agriculture
VP of Technology at TELUS Agriculture & Consumer Goods, a global digital solutions company driving the best producer-to-consumer outcomes.
Food and agriculture—made up of a complex ecosystem of entwined dependencies—is a sector ripe for the adoption of blockchain technology. If food and agriculture are to meet their obligations and opportunities, an increased level of transparency and sharing is essential. Blockchain is a vital tool to secure this ecosystem and ensure everyone benefits.
A blockchain is a ledger of records (also known as blocks) that are stored across a network of many computers. The ledger is secured with cryptography to ensure that once written, each block cannot be altered. The blockchain can be used to manage many types of data such as online transactions or documentation such as shipping manifests or veterinary records. Given the myriad items and valuable transactions that are part of everyday food and agricultural production, blockchain is an ideal element for the sector.
Across the agriculture value chain, it is vital to establish trust; there is a general concern about data sharing within the industry. Utilizing a blockchain-based solution provides greater transparency around the data and, more importantly, protects the use of that data upstream and downstream.
Track And Trace
At present, large swathes of food and agricultural processes are not shared. This opacity inhibits the grower, manufacturer, retailer and, ultimately, the consumer, as none can clearly see the actions and values that the other has contributed. Blockchain has the ability to help improve trust and facilitate the sharing of this information for greater clarity.
The visibility generated by solutions using a blockchain can improve the understanding, tracking and collaboration between all areas of the sector, which in turn can enable players to meet economic, environmental, health and commercial demands, all of which are increasing. With greater clarity, the industry can finally see the actual cost of production, and food valuation will become more aligned with real costs of input and labor.
A good example of visibility backed by blockchain is the De Beers Tracr platform. This platform allows De Beers to provide assurance as to the provenance of natural diamonds.
Business advisory organization McKinsey states that agriculture could realize $500 billion in additional value by 2030 through increased use of connectivity and technology. There has been digitization within farming, with transformational farmers using weather, soil type, crop and livestock data alongside close relationships with input providers. Yet as the McKinsey research shows, the full potential of data in agriculture is far from being realized; this has resulted in data silos across the sector.
Data silos fail to deliver insight that is impactful to everyone in the food production process, as there is no ability to analyze, collaborate and resolve issues together. Much of the problem results from poor data transparency. This can lead to distrust, meaning that farming and food production accept inherent risks by continuing with data methods that foster data silos.
The transparent nature of the blockchain, however, provides the food and agricultural sector with a platform for shared business benefits. An ability to discover and respond to vulnerabilities in the supply chain can protect growers, input providers, makers, retailers and consumers. This can enable greater optimization and increased accuracy, both of which are essential as food and agriculture deal with unpredictable yields as a result of climate change, new food provenance regulations and changing customer expectations.
A Growing Need For Transparency
Before the Covid-19 pandemic, China was impacted by the “zombie meat scandal” where authorities seized 100,000 tons of out-of-date meat. In 2016, the European Union (EU) reported more than 700 alerts for food-related risks. Covid-19 has increased the awareness of consumers and the demands of retailers and producers for high visibility across the entire food chain. With every transaction or input placed on a blockchain ledger, the risks of fake food labeling can be reduced.
Blockchain can only deliver increased optimization and transparency in food and agriculture if the sector embraces data sharing. As academics Simone van der Burg, Leanne Wiseman and Jovana Krkeljas write in SpringerLink, this future “can only become a reality if farmers are willing to share their data with agribusinesses that develop digital technologies.” The authors continue to mention that the EU Code of Conduct for agricultural data sharing by contractual agreement encourages transparency about data use to grow trust in data sharing.
Codes of conduct, like the EU code, are a positive development to ensure farmers trust digital technologies; the use of blockchain can help them understand the value of their data. The World Economic Forum (WEF) believes blockchain will become essential for the sector if it is to “address consumer demand for transparency and support government aims to protect citizens from fraud.” WEF adds: “This can be done by validating the source of the inputted information and increasing automation to lessen the risk of human error and prevent data from being deleted.”
Blockchain in food and agriculture is not science fiction; the technology is already in use and making a difference within the industry. Major food and retail companies such as Dole, Unilever and Walmart have formed a collaboration to work with leading technology vendors to develop and deploy a blockchain.
Meanwhile, Dutch brewery Heineken has implemented the EverGreen strategy to drive not only business growth but also to improve sustainability across the organization. The only way Heineken could achieve this was to improve connectivity between its suppliers and partners; a development like this is but one step away from the adoption of a blockchain.
Although food and agriculture is a complex ecosystem, blockchain delivers a transparent ledger to provide clarity and is vital to the future of this industry. The key to the success of blockchain is bringing the participants of industry value chains together to collaborate and having a platform to facilitate that.
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